A workstation broadens the Desktop V mix

With the award this month of the Desktop V contracts to Hughes
Data Systems Inc. and Zenith Data Systems, the Air Force appears to have succeeded in
stretching the customary definition of the PC requirements buy.

Hughes will supply a 64-bit reduced-instruction-set-computing workstation and not a PC
for its high-end desktop system. E.O. Knowles, president of Hughes Data Systems, told GCN
his company bid a 166-MHz AlphaStation 200 4/166 from Digital Equipment Corp. for advanced

Knowles said the AlphaStation is virtually identical to the machine Hughes bid as the
low-end workstation on Air Force Workstations, a $956 million contract awarded in March [GCN,
April 1, Page 1]. Hughes shared that award with Sun Microsystems Inc.

Officials at ZDS declined to comment on their Desktop V products until the bid protest
period ends late this week or early next week. Rumor on the street is that a protest is
likely from one or more of the unsuccessful bidders, though none would say last week that
they would file for review of the award.

Contracting officials at the Standard Systems Group in Montgomery, Ala., last week
debriefed the unsuccessful bidders, which include Electronic Data Systems Corp.,
Government Technology Services Inc., International Data Products Corp., NCR Corp. and
Sysorex Information Systems Inc.

The Air Force predicts that Hughes and Zenith will sell as many as 360,000 desktop and
portable computers through the multibillion-dollar Desktop V program. Hughes won a $924
million contract, Zenith a $1 billion contract.

Meanwhile, a third award for Desktop V is set for July through a separate competition
limited to companies participating in the Small Business Administration's 8(a) program for
small, disadvantaged businesses.

The three contractors will then compete for orders from the Air Force and other
civilian and military agencies. For the first time, the Army and Navy are barred from
buying goods through the Desktop contracts.

In addition to computers and servers that run Microsoft Windows NT, Desktop V will
deliver peripherals and a wide variety of applications.

ZDS, which was acquired by Packard Bell Electronics in April, has won four of the Air
Force's five desktop procurements. The company shared the Desktop IV contract with GTSI.
About 348,000 PCs, plus software and peripherals, were sold under Desktop IV by the time
it expired Feb. 1.

Demand for PCs on Desktop IV was intense: The contract exhausted its 300,000-system
limit a full 10 months before its expiration date. Under an extension to the delegation of
procurement authority, Air Force customers bought an additional 48,000 PCs last winter.

Air Force sources said Desktop IV has racked up $997 million in sales to date, a figure
that probably will increase because software and peripheral sales on the contract will
continue through 1998.

Award of Desktop V first was scheduled for January 1995. Delays in producing a final
request for proposals first pushed it back by a year. Then fierce competition from a field
of seasoned PC vendors ultimately forced the Air Force to hold discussions, delaying the
award another five months. The Standard Systems Group initially had hoped to award Desktop
V without discussions [GCN, July 3, 1995, Page 3].

"This award is the result of a lot of hard work a lot of people," said Lt.
Col. J.D. Smith, the Desktop V program manager in Montgomery. More than 30 full-time
employees worked on the massive buy.

"Customers are going to very pleased when they see what's available on the
contract," Smith said. "It's a very good deal for the Air Force and other
government customers." VZDS manufactured its Desktop IV PCs at a facility in St.
Joseph, Mich. Now that it is part of Packard Bell, ZDS will close that facility and
probably move manufacturing to a new Packard Bell plant in Sacramento, Calif. In a
statement, ZDS said federal contracting officers must review and approve any changes in
its manufacturing and distribution operations.

Some observers had predicted that a RISC computer would show up on Desktop V. For the
advanced desktop system, bidders had to offer a computer that scored at least 2,500 on the
SPECint92 benchmark and could be upgraded to 3,900. Other PCs on both Hughes and ZDS's
bids are expected to be based on Intel Corp.'s Pentium processor.

Based on Knowles' statement that the DEC AlphaStation 200 on Desktop V is identical to
the Air Force Workstations box, buyers can expect to get following for about $6,100: 2D
Video Graphics card, 1.44M floppy drive, keyboard, mouse, PC card interface, 40M RAM,
internal CD-ROM, internal 4G SCSI-2 hard drive, surge suppressor, ANSI C. Monitor options
are a 17-inch or 21-inch color display.

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